Tyler Cowen, the American economist, academic and writer recently went head to head with Erik Brynjolfsson of MIT’s Sloan business school, in a debate that was nothing short of fascinating. The impressive showdown between (arguably) two of the best minds in business theory centred around a very topical issue; ‘is technology society’s economic engine?’
Discussing facts and trends – it became apparent we (the Western world) have had economic growth, and productivity growth, and yet we haven’t had corresponding job growth. Could technology be the culprit?
Tyler made some fine points in stating “We’re basically trying to run the next industrial revolution on one sector”, and that “The one sector we have that’s doing phenomenal things is making it easier to outsource production and labour.”
In the U.S specifically, median income hasn’t risen since 1997, and since 1973 it is only up 25 percent, with no net job growth over the last decade.
Tyler argued that we are generating new ideas today at one sixth of the speed we did in the 1930’s, and that what is deemed to be our most productive and innovative time in our history is in fact a time of near stagnation by comparison. On the flipside, Erik then countered by stating “Technology is growing faster than it ever has before” and it is the ‘winners’ who are using that technology. Furthermore, stating “There has been more wealth created in the past ten years than ever before in human history.” – seemingly ignoring the fact those gains have been for an elite few, resulting in the very reason the worlds streets are awash with ‘Occupy X Protests’.
Mr Byronjolfsson went on to say, “The average person not keeping up is a symptom of fast growth, not stagnation”, angling at the fact there isn’t a problem per se, only with those who cannot keep up with technology.
The world is getting tremendously wealthier, only it’s not being distributed evenly. When asked how to address this, Mr Byronjolfsson said the responsibility lay in the hands of entrepreneurs to create new industries and new jobs for the new, growing population. “We need easier ways for entrepreneurs and innovators to create and we need to lower the barriers for business creation”.
Curator of the debate, Erick Schonfeld (editor of Tech Crunch), said later “Many of us take for granted that technology is the brightest spot in the economy, where most of the innovation and job creation occurs. But if you look more broadly at the impact of technology across every industry, it doesn’t look so great. Is the western worker in the same position today as the workhorse was 100 years ago when it was replaced by another technology: the engine (first steam, and then internal combustion)? Peak employment for horses was in 1901, there were 3.25 million working horses in England. Those jobs went away with the introduction of machinery, tractors, cars, and trucks.”
So going forward, will technology (across the general population) help to aid job growth, or will it in fact hinder our progress out of the current issue surrounding mass unemployment and wealth inequality? This is a question almost impossible to answer definitively; however, we’d love to know your opinion. Personally, we believe the root problem is in education. If you look at the graph below, granted it is for the U.S, the less people are educated and brought up in a culture of innovation and technology, the longer this problem will persist. Do you agree?
